House panel oks tax provisions on Dep’t of Water, DDR

The panel, chaired by Albay Rep. Joey Salceda, approved the still-unnumbered substitute bills proposing these new departments. (File photo: Joey Sarte Salceda/Facebook)

MANILA — The House Ways and Means Committee on Monday approved the tax provisions of two proposals seeking to create a Department of Water Resources (DWR) and Department of Disaster Resilience (DDR).

The panel, chaired by Albay Rep. Joey Salceda, approved the still-unnumbered substitute bills proposing these new departments.

For the proposed DDR, special rules on the grant of exemption from taxes, import duties, and donor’s tax shall be established to facilitate prompt and efficient response to disasters.

The bill shall grant exemption from: taxes and import duties for foreign disaster assistance or international donations; donor’s tax for local disaster assistance; and value added tax for goods and services donated from abroad.

Tax incentives shall also be granted to encourage members of the private sector to render aid or provide disaster assistance, and to invest in disaster resilience and climate change adaptation measures for their residence, communities or businesses.

Local government units may implement local tax rules which would grant disaster victims reasonable reduction, exemption, or deferment of local taxes or other necessary action at the local level to provide tax relief to disaster victims.

“The Department must consult the Board of Investments under the Department of Trade and Industry which formulates the Investment Priorities Plan. The IPP lists the areas for investments eligible for tax incentives,” Salceda said.

The Bureau of Customs shall be mandated to create rules that would hasten the processing and release of donated goods and equipment to disaster victims and affected areas.

The DDR shall create and provide policies, programs, and projects — such as business tax relief and subsidies — to encourage business investments and to stimulate economic activities in affected or disaster-prone areas.

As for the proposed DWR and Water Regulatory Commission, the regulatory units shall be required to establish tariffs, rates, and other charges, which are fair and reasonable, and ensure economic viability and a fair return on investments.

“The above-said non tax revenue provision is authorized and in conformity with the provision set forth in Book IV, Chapter 12, sec. 54 of the Administrative Code of 1987,” Salceda said.

“Thus, the heads of bureaus, offices, or agencies may, upon approval of the department head, charge and collect the cost of the services rendered by the bureau, office or agency in excess of cost, as prescribed by law or by the pertinent authority,” he added.

The tariffs, rates, and charges shall be based on a rate-setting methodology and shall take into account the following: reasonable and prudent capital and recurrent costs of providing the service including a reasonable rate of return on capital; efficiency of the service; incentives for enhancement of efficiency; willingness to pay the customers; equity considerations; and administrative simplicity.

Tariffs, rates, and charges set by the regulatory units shall be presumed valid and reasonable unless a protest or contest is filed with the commission.